CHAPTER ONE: MARKETING STRATEGY. Introduction to Marketing Professor McGill

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1 CHAPTER ONE: MARKETING STRATEGY Introduction to Marketing Professor McGill

2 Introduction: The shift from Production Orientation to Market Orientation

Production Orientation Until the early 1950 s Based on the belief that consumers will buy products that are inexpensive and readily available Mind set of the

3 Production Orientation Until the early 1950 s Based on the belief that consumers will buy products that are inexpensive and readily available Mind set of the mass production, industrial age Simple: Make things and push them out into the market No market research or any thought as to what the consumer actually wants

4 First Signs of the Shift Alfred Sloan, CEO of General Motors in a 1933 letter to stockholders, called for: An Operating philosophy that extends through all phases of the business Serve the customers how they want to be served!

5 Marketing Orientation A company must understand what the consumer wants, needs and values Company must then organize itself to produce and deliver the products and services that the customer s truly value Increased competition and market saturation change way of thinking.

6 Examples of Transitions Ford Motor Company Henry Ford said "They can have any color they want, as long as it's black." Gillette Company Very simple design for decades with little concern over what the consumer wanted.

8 Real World: Ambush Marketing and Product Placement

9 Ambush Marketing

10 Product Placement

11 What are other examples of product placement?

12 Chapter One: Marketing Strategy

13 What Chapter One Covers Basics of business strategy Aligning marketing strategy with business strategy How market strategy changes in the phases of the product or service life cycle

14 Business Strategy Military-like: Strategy for controlling and utilizing resources A satisfied customer is the best business strategy of all. Human Physical Financial capital Strategy is a plan that aims to give an enterprise a competitive advantage over rivals.

15 Business Strategy

16 Aligning Marketing Strategy with Business Strategy

17 Synergy: Business and Marketing Competitive threats Profitable opportunities Areas of market growth, maturity, decline Latent and explicit customer needs Ideas for distribution and pricing

18 Most important question: Why should customers buy our product or service and not those of the competitor?

19 Marketing Strategy The target market How the product or service will be positioned to appeal to the market How the product will be branded The target market size The primary benefit as seen by the customers An estimate of sales, market share, and profits that the product could generate now and in the future

20 Product Life Cycles Useful tool for anticipating future challenges

21 Product Life Cycles: Four Phases 1. Introduction Phase 2. Growth Phase 3. Maturity Phase 4. Decline Phase What does the book mean when it says that the computer has become a commodity product?

22 Typical Product Life Cycle

23 Introduction Phase Pioneers try to draw attention to The Next Big Thing Revenues eaten up by development, manufacturing and marketing costs.

24 Growth Phase Net income shoots up, ending start-up losses Many immediately invest profits into more development. Bottom line sees little change

25 Growth Phase: Key Goals Switch from creating product awareness to brand building This is because others are jumping on the bandwagon Therefore you need to differentiate yourself A good idea is to extend the product

Maturity Phase Flattening of the market Decreased profit margin Punching match between entrenched competitors Product changes become incremental, not groundbreaking!

26 Maturity Phase Flattening of the market Decreased profit margin Punching match between entrenched competitors Product changes become incremental, not groundbreaking! The marketing challenges in the mature phase include: Protecting market share through intense promotion Reducing manufacturing cost to allay price pressure Eliminate weakness in the product Leverage success of current brands with brand extensions (features and innovations)

27 Decline Phase Technical obsolescence Changing buying behavior Poor marketing innovation Solutions Promote new uses for old products Find new markets Back to the drawing board!

28 Finished for this week! Read Chapter Two And study for the Quiz!

Strategy in brief. Lecture 1

Strategy in brief. Lecture 1 Strategy in brief Lecture 1 Strategic management ranks as one of the most prominent, influential, and costly stories told in organizations. It is how an organisation takes what happens in the external